A Proposed Moderated Mediation Model of Customer Loyalty Outcomes: An Abstract

Abstract

To date, research has revealed that the concept of customer loyalty is tantamount to gaining strategic success during customer exchanges (Cronin et al. 2000; Wolter et al. 2017). To this end, this paper seeks to determine the antecedents of enhancing loyalty outcomes associated with the service exchange. Three studies are undertaken to not only propose the antecedent effect of satisfaction and mediating effect of value on loyalty outcome but also to further advance understanding by identifying the moderating effect of perceived justice to service satisfaction, value, and customer loyalty outcomes.

The direct effect of satisfaction on loyalty outcomes such as (a) identification (b) exclusive consideration, (c) advocacy, (d) strength of preference, and (e) share of wallet was supported in our study. Assessment of the indirect effect of value on loyalty outcomes was based on the bootleg confidence interval estimates associated with each effect (Hayes 2017). From these tests, four of the five models proved value as a significant (p-value ≤0.001) mediator. Only the influence of satisfaction on strength of preference proved not to be mediated by value. A moderated mediation model of perceived justice and the relationship between satisfaction and value was also tested and suggests that greater perceived justice enhances the effect of satisfaction on value. Moreover, perceived justice positively moderates the strength of the mediated relationship between satisfaction and loyalty outcomes through value such that the mediated relationship is stronger under greater levels of perceived justice for loyalty outcomes

The purpose of this study was to gain greater understanding of the antecedents and moderators of customer loyalty outcomes. Herein, the findings suggest that value plays a significant role in mediating the influence of satisfaction on all loyalty outcomes. Further, the indirect effect of value is moderated by increased justice perceptions such that perceptions of value are enhanced when customers feel a heightened sense of justice during the service encounter. This proved true for all outcomes with the exception of strength of preference.

These findings have significant implications for service strategy in that, while value tends to be a key driver of loyalty, its role is diminished if customers perceive injustice during the service encounter. Thus, equity in the exchange is a key driver of loyalty outcomes.